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KATHMANDU, MAY 30
Whether one looks across the entire region in its vast diversity, at groups of countries of similar income or geography, or at individual economies, there is no question that Asia has been borrowing fast.
This is true whether the debtors are governments, corporations, or households. Every sector has tapped finance with gusto. Debt burdens - that is, debts as a percentage of gross domestic product - grew large, and in some cases massive. COVID-19 has made them much worse.
Trillions of dollars were spent on controlling the virus, protecting people, and propping up the economy - most of it on credit.
So, it is high time to ask the question: Is Asia's debt sustainable? A team of 22 experts, convened by ADB's Economic Research and Regional Cooperation Department, have provided their answers in a new book titled "The Sustainability of Asia's Debt". Bottom line: for a number of reasons, the debt seems sustainable, at least for now. Learning from previous crises, high- and middle-income Asia developed its domestic capital markets for most of its public borrowing.
A version of this article appears in the print on May 31, 2022, of The Himalayan Times.
